Samsung’s new free music app means another headache for Pandora

Market Realist

Why has Pandora reported a sequential decline in listener hours? (Part 4 of 5)

(Continued from Part 3)

Samsung launches free music service Milk

Samsung recently launched a new free music application called “Milk” for users of its Galaxy devices. The app will be available as a download on Google (GOOG) Play. This service will directly take on Pandora (P), which is the leading player in the Internet radio segment. In the earlier articles of this series, we discussed that although Pandora is the current undisputed leader of the Internet radio segment, it faces pressure from Apple’s iTunes Store. The fact that Apple’s (AAPL) iOS has a strong presence in the U.S. in the smartphone operating system market gives it a better chance of gaining market share in the Internet radio segment in the long term. Samsung too is a strong player in the U.S. smartphone market, so it’s becoming another headache for Pandora.

Samsung continues to gain market share

As per the above chart, Samsung is second only to Apple in the U.S. smartphone market, with a market share of 26.7%. Samsung is poised to gain even more market share in the coming months with the launch of a new smartphone from Samsung, the Galaxy S5. The Galaxy S5 will hit the U.S. markets in May this year and will be available with all the major U.S. telecom providers, such as Verizon (VZ) and AT&T (T). Similar to Apple’s iTunes Radio, the Samsung Milk service will be available on all Galaxy devices by default. Users tend to adopt the service that’s available to them by default, so Apple and Samsung will achieve more user adoption of their Internet radio services if they make smartphone market share gains.

Samsung calls Milk the next big thing in music

Samsung’s tagline for Milk is, “Samsung Introduces Milk Music, the Next Big Thing in Music.”

According to Gregory Lee, president and CEO of Samsung Telecommunications America and Samsung Electronics North America Headquarters, “Milk introduces a fresh approach to music that reflects our innovation leadership and our focus on creating best-in-class consumer experiences.” Lee further states, “We’re offering consumers amazing, rich music experiences built around what matters most to them and their lifestyle.”

In the next part of this series, we’ll discuss Spotify’s acquisition of Echo Nest.

Continue to Part 5

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